Legal Tech Startups in 2014

The legal tech space has become explosive. Investors are pouring millions into legal innovation as founders excitedly plan to disrupt the legal space. Some attorneys are thrilled about the thought of new technology to better their practice while others are skeptical about the need for disruption — or even using the termdisruption.

In any case, legal startups are big and getting bigger.

How Big is the Legal Startup Market?

According to AngelList, there are roughly 350 companies in the U.S. tagged in legal. If you break those down to legal startups, there are 101 listed. Josh Kubicki reported that legal startup funding is at an estimated $77 million year to date with the prediction that it will be much higher than the $458 million invested in 2013.

How Many Will Succeed?

David Perla, legal tech entrepreneur and investor, explains that, realistically, “a significant majority will fail.” When they do, people will say it is “evidence that the legal market is stuck in the dark ages, that it’s not ripe for disruption, that there’s no innovative … but the vast majority of startups in every industry do fail.” Watch the rest of this fascinating interview with Perla by Lee Pacchia:

Before we look at the startups moving to change the legal space, let’s talk about the legal startup recipe.

What is a Startup?

Paul Graham says, “A startup is a business designed to scale dramatically.” His essay “Startup = Growth” explains that a startup does not have to have venture funding or an exit to be considered a startup. The only essential thing is growth.

Eric Ries explains, “A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”

While Steve Blank, Silicon Valley entrepreneur and Lecturer of Entrepreneurship at Stanford and Berkley among other institutions, describes a startup as such: “A startup is an organization formed to search for a repeatable and scalable business model.”

2014 Legal Startups

Caveats: This list only includes companies operating in the US. It does not include law firms, back office (support, ancillary, lateral), middle office (HR, billing, etc.), or marketing. Leave a comment if I missed any.

Legal Research

Westlaw and LexisNexis have been the names in legal research from the start and even with all of their resources, lawyers and law students have wanted a better way to search legal records. Fastcase was the first to make legal research open and online and continues to run a successful company providing free law on the web and through the mobile app. In the past few years, more competitors have started to pop up focusing on a particular niche within the legal research space.

Big Data

Crowdsourcing

Docket & Brief Retrieval

Lawyer Marketplace

Lawyer matchmaking, lawyer marketplace, lead gen for attorneys… call it what you will; this is not a new concept but there are several new players in the space. Avvo has been leading this market for the past 7 years combining a lawyer marketplace with a Q&A forum and ratings directory. After raising a $37.5M Series D in April of this year, Avvo has plans to expand globally while others in this space are just getting started.

Practice Management

Just five years after their launch, Clio has raised the stakes by closing on a $17.9M Series C round. Although they are the leading software in the legal practice management space, there are many other options for attorneys to manage their client files.

Case Management for Specific Practice Areas

Each area of law has its own workflow and file management techniques. These startups are taking the idea of practice management software and applying it to a specific practice of law to customize the experience for attorneys.

Depositions

Discovery

Litigation

DIY Legal Forms & Contracts

Legal tech isn’t just for attorneys! There are many solutions for the Average Joe to take care of legal work on his own. Lawyers don’t always agree that this is the most ethical approach but it never stopped LegalZoom. Now to compete with LegalZoom and RocketLawyer are a collection of legal startups offering the ability to assemble your own case.

Online Dispute Resolution

Document Automation and Assembly

The need for document automation and assembly is essential in every area of law. These startups help attorneys do in-office tasks at a fraction of the time and costs! Throw away those yellow legal pads full of intake notes and start managing your legal content in an easy-to-use app.

Social and Referral Networks

Attorneys use listservs, forums and groups to connect with one another about their practice, share referrals or get advice on a specific case. These legal startups offer lawyers a private network to stay in touch and help each other grow their practice.

Lawyer-to-Lawyer Outsourcing

More help in the office please! Solos and smalls are growing their business and the best way to minimize overhead and build a profitable law practice is to outsource the busy work. That’s what the team at Curo Legal is doing. They are helping attorneys become more profitable by giving them the resources they need to work as a virtual office and outsource all but the law. Here are a few startups that are providing legal staffing for the modern attorney.

Great article. Didn’t see ActionStep on the list. Really excited to see legal startups focusing on specific niche areas with the legal industry. Wonder how many are looking to start an ecosystem to integrated with other related online apps in the legal space.

Thanks so much Janine for this article. Great compilation of expert opinion and data. eBrevia (Stamford, CT, 2011, live, http://ebrevia.com) is another startup in the contract analytics space. We’re commercializing machine learning tech from Columbia University.

Another one to add to your Attorney Outsourcing list is Attorneys in Motion @attysinmotion / http://www.attorneysinmotion.com. Attorneys in Motion provides outsourcing to Attorneys throughout all 50 states.

In terms of lawyer marketplace and free expert advice http://www.ipnexus.com is an excellent choice for anything IP and innovation-related. They have launched in August and are operating in the United States and other jurisdictions. Given that their directory now includes almost 400 professionals (quickly rising, last I checked) they should have definitely been listed in the article.

Great list and graphics Janine – still very relevant article! http://www.getfactbox.com would fit in the Case Management – Litigation section. http://www.getfactbox.com organizes case facts and transforms them into work product. Founded in 2013 in San Francisco, launched in July 2014 and growing fast. With me, a female CEO/cofounder, might our entrance inch up the female founder percentage up to 15%?